If you use an existing VMware Workstation 2 virtual machine under VMware Workstation 4, the virtual hardware is upgraded automatically. The upgrade gives you access to new features, but the process is one-way  you cannot reverse it.

Start by using an existing configuration file (.vmx) and virtual disk (.dsk if you do not convert to new filenames when you install VMware Workstation or .vmdk if you do convert).

The first time you power on the virtual machine under Workstation 4, a dialog box appears, offering the choice of upgrading the virtual hardware or powering off. If you want to make a backup copy of the virtual machine before upgrading the virtual hardware, power off and make the backup. Otherwise, allow VMware Workstation to upgrade the virtual hardware.

Note: If you are upgrading a virtual machine that runs from a physical disk, rather
than a virtual disk, you may see the following error message while VMware
Workstation is upgrading the virtual hardware: "Unable to upgrade <drivename>. One
of the supplied parameters is invalid." You may safely click OK to continue the upgrade
process.

Upgrade VMware Tools to the new version following the instructions for your guest operating system in Installing VMware Tools. You should not remove the older version of VMware Tools before installing the new version.

Upgrading Virtual Hardware in the Guest Operating System

Upgrading Virtual Hardware in the Guest Operating System

After upgrading the virtual hardware, you may need to take several steps to be sure the new virtual hardware is recognized properly by the guest operating system. If you are using a Windows 95, Windows 98 or Windows Me virtual machine created under VMware Workstation 2, take the steps listed under the name of your guest operating system.

With other guest operating systems, these special steps are not needed. Plug and Play should recognize the new virtual hardware and install any needed drivers smoothly.